Effective Risk Management Solutions for Solvency II
The requirement for a robust Governance, Risk and Compliance (GRC) management system underpins much of the proposed Solvency II regime. (FSA DP08/4 "Insurance Risk Management: The Path to Solvency II", September 2008).
There are three key aspects:
- Solvency II will bring change to the UK regulatory requirements
- (Re) Insurers are encouraged to make effective implementation plans now
- The board and senior management are responsible for making it work.
How will Solvency II affect your organisation?
- Effective Risk Management system - owned and implemented by senior management, respecting the fact that delegation of responsibilities does not mean dilution of responsibility
- Own Risk and Solvency Assessment (ORSA) - a risk-based evaluation of the whole firm to identify, assess, monitor, manage and report the short and long term risks (re)insurance undertaking faces or may face
- Different disclosure requirements – there will be significant changes to the types of information UK firms are required to report for both public and supervisory purposes
- Internal Audit function - required for all (re)insurance firms to include an evaluation of whether the internal control system remains sufficient and appropriate.
The FSA estimates that firms should start their planning now if they are to be prepared in time for the go live date of October 2012. Optial’s SmartStart platform provides an excellent starting point with rapid deployment capability.
Optial is a web-based management system that incorporates the full spectrum of operational risk, governance, risk and compliance as well as audit activities to support you in your preparation and management of the Solvency II requirements.
Optial provides support for:
- Loss Events - record, monitor, report and analyse trends
- Key risks - measure, track, manage and report all key risks
- Risk scenario templates - to measure the impact of risk scenarios and related mitigants
- Controls - assess effectiveness, record breaches, create actions
- Risk Self Assessments through Risk & Control Self Assessments
- Audits - automatic generation and distribution of audits, record audit findings, create actions and track progress
- Business continuity management - identify the potential impacts to a business and to provide a resilient framework in response
- Business Intelligence - for KPIs and Performance Management and advanced reporting and data analytics
- Quantitative modelling - for a variety of modelling options
- Quality Data - collection of quality and consistent internal loss and risk data for all reporting purposes
- Integration of external loss and other risk related data for consolidated reporting.
It therefore provides the infrastructure for creating and implementing the broad range of control, risk management and governance processes that are crucial for compliance with the directive.
Added to this, Optial's modular pre-configured and web-based solution means that organisations can be up and running very quickly.